The Warehouse plans to spend $400 million revamping its Red Sheds. Management has admitted the stores are substandard and staff morale is low.
The country's largest listed retailer on Friday announced an 8.9% fall in full-year profit because of slower sales. Sales fell slightly to $1.7 billion, but sales at Warehouse Stationery stores improved.
The overall fall is after stripping out one-off items from a profit result for the year to July that was up 29% to $77.8 million. Shares fell 7 cents to $3.38 on Friday on the news.
New chief executive Mark Powell says that even though profit has fallen, the core business is sound and he is confident a three-year turnaround plan will boost sales in the medium to long term.
Mr Powell says the firm will invest extensively to modernise its stores but that will dent next year's profits.
He says the company's rejuvenation has already begun.
